Crypto staking has become quite popular in the industry because it is a means of earning money for those who own digital assets. Therefore, it is not surprising that crypto staking services were recently introduced by Binance US. Binance is the world’s biggest crypto exchange in terms of trading volume and its division in the United States has introduced this service in order to compete with its rivals in the country, primarily Coinbase.
Binance introduces crypto staking
Those using the Binance US platform will now be able to take advantage of staking services for a wide array of cryptocurrencies. They will be able to stake some notable cryptocurrencies, including Avalanche (AVAX), Audius (AUDIO), Solana (SOL), Binance Coin (BNB), Cosmos (ATOM) and Livepeer (LPT).
The twitter account of the company also revealed that the exchange would be adding more cryptocurrencies for staking. According to Binance, crypto staking was previously only limited to blockchains based on the proof-of-stake (PoS) algorithm. This is a consensus model designed to give rewards to use in return for validating transactions. The PoS algorithm dictates that the greater number of tokens a user locks into the blockchain, the higher the possibility of them being chosen as validators and getting the rewards.
But, it should be noted that most of the blockchains have imposed a minimum number of tokens that are required from users who want to become validators. Hence, those who do not have a high number of tokens can only earn rewards when they pool their funds.
For instance, Ethereum is shifting from a PoW consensus to PoS one and users can participate in staking if they are ready to lock 32 ether. Crypto exchanges offer investors who have smaller holdings the perfect opportunity for benefitting from staking. They can just join a pool and also earn rewards.
Binance’s staking services
The Binance US division operates the same way as its rivals in the country, such as Gemini and Coinbase. Depending on what crypto the user owns, it allows them to stake their holdings at different rates. For instance, those who decide to stake its own token named Binance Coin (BNB) can get an annual return of 6.4%. Furthermore, staking Livepeer can help people in earning 18% APY returns. However, it should be noted that these returns can be changed.
This change is made after calculating the average staking rewards that have been generated in the last 90 days. Another important thing to know about the staking process is that users are not permitted to withdraw the staked tokens. This is where Binance stands out because unlike its competitors, it permits its users to withdraw their tokens whenever they want. But, you should also be aware that the crypto exchange charges a commission for ‘technical staking requirements’. This means that you may be required to pay a fee for withdrawing the staked tokens. The fact that this feature is unique to Binance certainly does add some appeal to the exchange and draws people to it.